Download - Shared Service in Lithuania 2010
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Shared Services andOutsourcing in Lithuania:
Intelligence counts
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CONTENTS
Lithuanias Shared Services and Outsourcing Market
Competitive Advantages
Success Stories
ICT FrameworkHuman Resources
Pool of Skills
Languages
Salary Rates
INVEST LT+ Financial Incentives Program
Information and Service Point
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Lithuanias Shared
Services and Outsourcing MarketLithuanias shared services and outsourcing market has made great advances in the latest
A.T. Kearney Global Services Location Index 2011, climbing up by 7 places to rank 14th globally, and being
rated better than the UK (16) or the US (18) as well as higher than the neighbouring Poland (24) or Hungary
(31) and the Czech Republic (35). With a bunch of multinationals providing services in the English, German, Russian,
Polish and Scandinavian languages for the entire European market, Lithuania has emerged as an attractive and still not
overloaded location for shared services and outsourcing business developments.
Investment projects in business services in Lithuania peaked in 2008 with 9 and another 6 in 2009-2010 fromcompanies such as Barclays Bankof the UK, Computer Sciences Corporation of the US, Western Union of the US,
and other prominent multinational players.
Market observers forecast a further rapid growth in the industry, whereas the Lithuanian
Government has set a strategic goal to be achieved by the country by the
year 2015 to become the Northern Europe Service Hub.
By 2015 the share of exports of services should make
approximately 1/2 of Lithuanias total exports.
Similarly, it is expected that 1/2 of the
total FDI in Lithuania will settle down
in the services sector by 2012.
We chose Lithuania becauseof the high quality of education here,
which has resulted in the development ofworld-class IT professionals, many of whom are
multilingual, and because of the quality of Lithuaniastechnology and connectivity. We will show the world the
talent that exists in Lithuania.Barclays Bank
Lithuania (Vilnius) was selected as an attractive location because of itsstrong talent pool of highly-skilled, well educated and
multilingual professionals, its stable political and improvingeconomic climate andworld-class infrastructure as well as theGovernments policy in attracting foreign direct investments.
Western Union
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Exclusive Talent Pool
40 % of population with higher education More than 40,000 multilingual university and college
graduates, and another 200,000 in the pipeline 90 % of Lithuanians speak at least one foreign language 50 % speak two foreign languages
Labour pool in finance and insurance of 17,100 (2010) IT and communications labour pool of almost 21,300 (2010)
23 universities and 23 colleges
Exceptional Geographic Location
Crossroads of North, East and West Pan-European transport corridors 4 international airports
Regionally best network of roads and highways
Leading ICT Framework
Global leadership in mobile e-signature Worlds 2nd fastest upload Internet in 2011 Worlds 6th and Europes No. 1 fiber broadband penetration Europes highest fiber optic density
EUs greatest GSM penetration Worlds No. 1 in the number of mobile telephone
subscribers per 100 population Lithuania ranked 34th and ahead of Hungary,
Latvia, Slovakia, Poland, Bulgaria and many othersin Digital Economy Rankings 2010 bythe Economist Intelligence Unit
Nice Place for Business and Life
23rd out of 183 worlds economies on the easeof doing business and outpacing Latvia, Slovakia,Slovenia, Czech Republic, Poland and Russia(World Bank Doing Business 2011 Report)
Low costs - among Top 10 least expensive Europeancountries (Eurostat)
Great life quality - among the best locations for
life in the EU and No. 22 in the world(International Living 2010 Quality of Life Index)
Competitive Advantages
Lithuania is on the track towards becomingthe Northern Europe Service Hub 2015.
Expanding international businesses must seizetheopportunity in Lithuania.
Premkumar Bhagwatsaran, CEO of Ideal Invent Technologies
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Company Name Type of SharedServiceActivities
Headcount Languages Used Country of Origin(Start date)
Wes ter n Uni on G lo ba l Ope ra ti onsCentre of
Excellence
500* English, German,French, Spanish
and other
USA (2010)
Ba rclays Bank Barclays Techno -logy Centre is an ITservices centre forthe global Britishbanking group
700* English UK (2010)
RunwayInternational
Contact centre 400** all Scandinavianand Baltic, English,French, Russian,German, Polish
Norway (2009)
SEB (VilniusOperations Centre(VOC)
Retail BankingSupport,IT support, HRadministration,Finance
200 Engli sh , Swedish Sweden (2008)
Unicall (KaunasCommunicationCentre)
Call centre 90 Lithuanian,Norwegian,Russian, English,
German
Norway (2008)
CSC Baltic(ComputerSciencesCorporation)
IT support andbusiness processoutsourcing
220 English, Danish,Norwegian,Swedish
USA (2008)
Citco BusinessProcessing
Internationaladministrativesupport(accountancy)
90* English Netherlands (2007)
Storebrand Baltic Insurance, bankingand assetmanagement forthe StorebrandGroup
120* Swedish,Norwegian
Norway (2007)
Mirror SupportServices(Lindorff Group)
Accountingservices, invoicingservices and othersupport services
75* Norwegian Norway (2005)
WorldOne IT support andcontact centre
150 English, German,Italian, Russian,Spanish, Polish,French
UK (2003)
TranscomWorldwide
Client relationsmanagement,contact centre
650 all Baltic, Russian,English, Polish
Luxembourg (2002)
Baltic Data Center(TEO Group/Telia-Sonera)
Data center andIT outsourcingservices
180 Lithuanian, English,Russian
Sweden andFinland (2001)
Lintel (TEO Group/TeliaSonera)
Contact centre 1000 Lithuanian, English,German
Sweden andFinland (1992)
* expanding,** in the Baltic States
Source: Invest Lithuania, 2011
Success StoriesLargest Shared Service Centres/BPOs in Lithuania
Lithuania is
theright place to start a business establish a company and develop as well
as test your products. If I started a business
one more time, I would definitely do thatin Lithuania again.
Ilja Laurs, CEO of GetJar
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ICT Framework
Information Technologies and Communications
Lithuania maintains worlds leading ICT resources and
infrastructure. Besides all most up-to-date ICT technologies(EDGE technology, 3G mobile communications infrastructure etc.)fully implemented and functioning in the entire country,the following significant records belong to Lithuania:
EUs greatest mobile penetration of 147 % Worlds No. 1 in the number of mobile telephone subscribers per
100 population - 3.4 million of Lithuanians use almost 5 millionactive SIM cards
Global leader in mobile e-signature 13 out of the 20 largest IT companies in the Baltic States are
based in Lithuania
Internet Worlds 2nd speediest upload Internet in 2011 Worlds 6th and Europes No. 1 fiber broadband penetration (23 %) Europes greatest fiber optic density Europes densest network of public Internet access points (875) 61 % of the Lithuanian population use e-banking and 86 %
declare their income tax online WiMAX 4G Internet
CSC chose Lithuaniato offshore from Denmark base becausewe found here very skilledIT specialists andScandinavian languages speakers.
Computer Sciences Corporation (CSC)
Source: Net Index by Ookla
Lithuania
ItalyLuxembourg
Austria
Germany
Netherlands
Denmark
UK
Ireland
0 % 20 % 40 % 60 % 80 % 100 % 120 % 140 % 160 %
147 %
146 %142 %
134 %
132 %
129 %
126 %
126 %
119 %
EUs higest mobile penetration in 2010
Worlds 2nd fastest upload Internet in 2011, Mb/s
0 5 10 15 20 25
South Korea
Lithuania
Latvia
Aland Islands
Romania
Iceland
Moldova
Andorra
Japan
Bulgaria
Sweden
21.06
15.02
13.46
10.88
10.18
9.95
9.45
9.42
9.33
8.84
8.04
Source: GSM European Coverage Report by European Commission
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Human ResourcesPool of Skills
Lithuania has one of EUs most educated people,which are countrys greatest gold and oil:
More than 90 % aged 25 to 64 have secondary or higher education(ranking 2nd in the EU, EU-27 average being around 70 %)
30 % hold higher education degrees, compared to the EU average of 24 % 40 % of the 25 - 34 year olds have higher education, which is almost
twice as high as the EU-15 average Almost 92 % of Lithuanian women aged 25 to 64 have secondary or
higher education, which is the highest figure in the whole EU
Employment in 2010 Students in Universities and Colleges in 2010
Labour pool composition in 2010
Finance andinsurance
ICT
Services
Manufacturing
Agriculture
Construction
Business andadministration
Engineering
Accounting
IT
Finance,banking andinsurance
10 %
8 %66 %
16 %
17100 21300
% of population with secondary or higher education
Source: Statistics Lithuania
Source: Eurostat
4800
4500
3100
5600
37000
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Languages
Lithuania is among the top 5 EU Member States withthe best multilingual skills. According to the Europeans and
Languages survey and Eurostat figures:
90 % of Lithuanians are able to participate in a conversation ina language other than their mother tongue. The EU-25 average is only 50 %,
50 % of the population speak two foreign languages, 90 % of Lithuanians are able to speak Russian, almost 40 % speak English,
and around 20 % know the German language.
2 universities in Lithuania have special curriculums of Scandinavian languages. Also, CSC,
Lindorff Group, Unicall, Runway International, operating in Lithuania, have specially designed3-5 month courses of Norwegian, Danish and Swedish, and the trained local employees successfully
serve clients in Scandinavian languages.
No other country has got such aunique know-how in WesternEuropean as well as eastern countries languages, different cultures and a va-
riety of business habits, which naturally developed in Lithuanias close historical relations
with other nations.Martin Loeffler, CEO of Eastern Europe Operations, Computer Sciences Corporation (CSC)
English
German
French
Russian
Other languages
Languages studied in 2010
10 %
3 %
5 %
9 %
73 %
Source:Statistics Lithuania
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Salary Rates
Labour costs in Lithuania are more than twice lower than those in other EUcountries and the US. The minimum monthly wage in Lithuania is currently
232 EUR, and the minimum hourly wage is 1.4 EUR. The average gross monthlyearnings have decreased due to the economic recession. After reaching a peak of
672 EUR in 2008 Q3, they decreased to approximately 600 EUR in 2010.
PositionNet Monthly Salary (EUR) Gross Monthly Salary (EUR) Total Monthly Employment
Cost (EUR)
From To From To From To
AccountantClerk
521 811 686 1067 900 1400
AccountantClerk 869 1303 1143 1715 1500 2250
ChiefAccountant
1158 2027 1524 2668 2000 3500
Procure-mentSpecialist
869 1303 1143 1715 1500 2250
CustomerServiceSpecialist
377 724 495 953 650 1250
HRSpecialist
869 1303 1143 1715 1500 2250
Developer 869 1593 1143 2096 1500 2750
JuniorDeveloper
579 1014 762 1334 1000 1750
SalesExecutive/Specialist
724 1303 953 1715 1250 2250
Source: Strategic Staffing Solutions International
Labour Costs (Monthly Compensation) in Shared Services and Outsourcing Sector in 2010The Baltics offerlower
costs than Western Europebut with the regulatory certainty of
the EU.Financial Times
Average monthly gross wages, EUR, 2010
3500
30002500
2000
1500
1000
500
0
Bulg
aria
Romania
Lithu
ania
Hung
ary
Estonia
Slov
akia
Pola
nd
CzechRe
public
Croa
tia
Slov
enia UK
Finla
nd
326 437600 631 714 782 843 932
1030
1475
758
Latvia
2173
3032
Sources: WageIndicator Foundation, Statistics Lithuania
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INVEST LT+ FinancialIncentives Program
Foreign investors interested in locating a business in Lithuania as well asforeign companies already operating on the Lithuanian market but eager tofurther expand may apply for INVEST LT+ financial investment support of up toEUR 3.5 million per investment project.
INVEST LT+ provides financial support to cover personnel training costs(up to EUR 2 million) as well as eligible construction, infrastructure and salary costs(up to 1.5 million), incurred by foreign investors establishing a services business unitin Lithuania. The financial support tool is designed to support foreign businessesinvesting into the production of export-oriented high-quality services as well asestablishment of qualified jobs on the market.
Multinationals such as Barclays Bank, Western Union, Ideal Invent Technologiesandand SEBhave already benefited from INVEST LT+ support when settling down in
Lithuania.
Financial support avilable perFDI project in the field of services
Construction, Infrastructure,Salary costs
up to EUR 1.5 million
Personnel training costs
up to EUR 2 million
Max possible support up to EUR 3.5 million
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Incentives Application Cycle (2-3 months)
Evaluation and approval(Ministry of Economy, Invest Lithuania)
Letter of Intent(Ministry of Economy)
Application for financial support(Lithuanian Business Support Agency)
Project Finance Agreement
The decision to move a part ofthe operations to Lithuania will help the SEB Group
to increaseefficiencyand to reduce the costs of this division,which is particularly urgent in view of the growing requirements
from clients and strengthening competition. We are happy that someof the functions are being moved to Lithuania where the SEB has
experienced professionals and a strong position.
SEB
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Information and Service PointINVEST LITHUANIA is a team of more than 30 professionals actively working to facilitate foreign
investors in Lithuania, as well as to spread the word all around the globe about immense business opportunities
on the biggest market among the Baltic countries. INVEST LITHUANIA is ready to make your investment dreams turninto a real success story in Lithuania, the Northern European Service Hub 2015, with an exclusive talent pool and world-leading ICT capacities 2nd fastest upload Internet, 4G mobile WiMAX technology and one of the best-
developed fiber braodbands all for your benefit.
The agency has helped such companies as BARCLAYS BANK (UK), WESTERN UNION(USA), IDEAL INVENT Technologies (India), SYSTEMAIR (Sweden), MOOG (USA),SEB (Sweden), CIE AUTOMOTIVE (Spain), IBM (USA), FINNFOAM (Finland),INDORAMA (Thailand), DEMATIC (Germany), RGE (UK), ALBRIGHTINTERNATIONAL (UK), CHRISTIE TYLER (UK), MARZOTTO (Italy),METSO PAPER (Sweden), INVACARE HOGH (Denmark),GLENDALE CABINS (UK) and many others to startdoing business in and with Lithuania.
INVEST LITHUANIA.Working answers.
I have worked with a number of groups such as yours over the years and I can safelysay that the professionalism, flexibility and speed of execution was without doubt the best
have experienced.David Larkworthy, SVP Head of Operating Strategy, EMEA-APAC, Western Union Financial Services
When we started collaborating with the Ministry of Economy and INVEST LITHUANIA, we receiveda very favourable standpoint and much interest as well as support, and decided not to look
elsewhere.Premkumar Bhagwatsaran, CEO of Ideal Invent Technologies
www.investlithuania.com